Main Street sentiment has soared in the wake of the election of Donald Trump on hopes that the Washington outsider will usher in an era of business-friendly policies to bolster the economy.
But as his presidency nears the 100-day mark, key campaign promises affecting small businesses have hit headwinds, including repealing and replacing the Affordable Care Act. On the other hand, Trump has followed through on other promises, signing an executive order on deregulation — often a top issue for smaller companies.
Now it remains to be seen how long optimism holds if Trump is unable to further his agenda in a timely way. By several measures, sentiment has climbed postelection, with a Wells Fargo/Gallup index released in March reporting Main Street optimism rose to prerecession levels on better business conditions and expectations.
The National Federation of Independent Business' monthly read on small business optimism is also holding above 104 — up above its historical average of 98 — but the data have not yet translated into real hiring and spending.
"We were pleased to see an enhanced focus on making sure regulations don't hurt small business, but health-care reform has been less positive. Nothing has happened, and costs continue to rise."
The conservative the federation is "generally pleased" with Trump's first 100 days in office, spokesman Jack Mozloom said.
"Optimism among small-business owners is tied directly to the expectation of big policy changes," he said. "Some of the president's executive orders have been outstanding, that's all great, but it isn't enough. If optimism is to be sustained, small business needs a sense of commitment from the White House to fix the tax system and repeal and replace Obamacare."
"It's been a mixed bag for sure," Molly Day, spokeswoman for the nonpartisan National Small Business Association, said of Trump's performance. "We were pleased to see an enhanced focus on making sure regulations don't hurt small business, but health-care reform has been less positive. Nothing has happened, and costs continue to rise."
Obamacare: 'I want it repealed'
Next month's optimism index from the NFIB will show how much Main Street's outlook is affected by Congress' failure to repeal and replace the Affordable Care Act with the GOP-proposed American Health Care Act, which included scrapping the employer mandate, a key issue for many small business owners.
Ben Pouladian, president of Deco Lighting in Los Angeles, grew his company just as the ACA was enacted, bringing him to more than 150 full-time employees today. Under the ACA, he has to offer workers insurance or face penalties.
"I wanted it repealed and replaced to give more freedom to business owners and their employees," said Pouladian, whose company manufactures LED lighting systems. "My premiums have gone up more than 10 percent year over year, and I have no predictability from a financial standpoint."
But not all groups are looking for the ACA to be repealed. Katie Vlietstra, spokeswoman for the nonpartisan National Association for the Self-Employed, said the group would like to see the law reformed and improved instead, as micro-entrepreneurs benefited from the law in some cases.
"We'd like to see more insurers involved and a better way for the individual mandate," Vlietstra said. "There hasn't been any appetite for compromise, and I think the White House has now gotten around to understanding you have to have a coalition of people to support you."
Mixed feelings about taxes
An announcement on broad outlines for a proposed tax plan is expected from the White House on Wednesday, but recent data from the National Small Business Association show nearly one-third of small business owners believe comprehensive tax reform will never be enacted, and more than a quarter said they're unsure if it will come to fruition.
Entrepreneurs like Laurie Sprouse are looking for simplicity and parity for big and small businesses in any new tax plan. Sprouse is president of Ultimate Ventures, a destination management company based in Dallas, which is structured as an S corporation and taxed at the individual level. The highest individual tax bracket is 39.6 percent, while the corporate tax rate is 35 percent.
"I am married, and my spouse may have a really good year, so we will get taxed at a higher rate. It's effectively taxing my business at that rate as well," said Sprouse, who has to hire an outside accountant part-time.
Back in Los Angeles Pouladian is also hoping for comprehensive tax reform and simplicity. He said measuring Trump's performance in 100 days is "overblown."
"He will be president for four years — we can't look at his presidency a quarter at a time," he said.